Euro ---> 1.70 next year

Strong opinions are safest if they cannot be put into action. At their meetings in Washington the Group of Seven finance ministers and the governors of the International Monetary Fund mounted no defence of the dollar â which they might just have the power to arrange â but demanded a faster rise in the Chinese renminbi, over which they have no power at all. It demonstrates the stalemate in the international financial system.

The lack of a statement on the dollar should be no surprise. There may still be some within the US Treasury who think fondly of a strong dollar, but exports â up 12.8 per cent in August compared to the previous year â are the bright spot in the US economy. The trade deficit has fallen a little and unless the dollar starts to plummet US officials will welcome that trend.